Friday, July 30, 2010

The Double Dipping Data

Consumer sentiment numbers are out this morning, as well as the GDP. These are not my favorite data points, but the second leg of the recession is picking up steam and even these faulty indicators are picking up distress noise.

Consumer sentiment plunged in July to its lowest level in 9 months. The survey's July reading on the overall index on consumer sentiment dropped to 67.8 from 76.0 in June.

Gross domestic product expanded at slowed a 2.4 percent annual rate,according to the Commerce Department, after an upwardly revised 3.7 percent growth pace in the January-March quarter. The GDP number mixes apples with oranges. The Commerce Dept uses outdated methods of collecting data. So when you have this number slowing it is likely that apples AND oranges sectors are declining and that it has been going on for some time.